Why did I receive a supplemental property tax bill?

Every so often we receive a call from a client several months after purchasing a home asking about a supplemental property tax bill they have received. They generally want to know what is this, why did they receive it and do they have to pay it if their property taxes are impounded. A quick visit to the San Diego County Tax Collector FAQ page answers the question of what a supplemental property tax bill is. It is an additional bill that reflects the increase or decrease in the assessed value of real property. State law requires the County Assessor to reappraise property upon a change in ownership or new construction. This is a supplemental assessment and reflects the difference between the new assessed value and the prior assessed value. If the property is reassessed at a higher value than the old assessed value, a supplemental property tax bill will be issued. So, if you purchased a home for a price higher than the previous owner’s assessed property value your purchase price essentially becomes the new assessed value and you must pay property taxes on the difference. If you are lucky and the new assessed value is lower than the prior assessed value a refund will be issued by to you by the county. This is not calculated during closing but only after the deed recording takes place, so any property taxes paid during escrow were paid on the old assessed value. Finally, you unfortunately do need to pay the supplemental property tax bill to avoid becoming delinquent on your property taxes. Even though you may have an escrow account where your property taxes are being deducted from your monthly payments supplemental property taxes are not accounted for when your escrow account is set up. As always, feel free to contact us if you have questions related to supplemental property tax bills or other real estate or mortgage related questions.